Trixietoes

Hi.

Just wondering from your experience.. what the process of buying somewhere is?

I've read that the process is quicker then the UK.

What is the usual min deposit that is required.
Costs for the legal help in buying
Any taxes that will need to be considered

We will rent at first until we feel ready to buy but I am just curious and like to be prepared for when the hunt may/may not start.

itxrd

Do a Search

asprilla

usual deposit is 10%, but this isn't set in stone.

Legal costs vary, you can do it yourself for free and only pay for the searches you need. This might cost $50-$70 all up. However most people use a solicitor or conveyancer. Costs between $200 and $1000, sometimes more.

Taxes - you will need to pay stamp duty when you purchase. This varies by state, look up the details yourself on google for NSW.

ABCDiamond

Buying a house in New South Wales - http://www.reinsw.com.au/default.aspx?ArticleID=477

Jacque

Hi Trixie

ABC's link is a great start and yes buying in NSW is a lot easier than the UK, as we don't have to wait in chains, like you guys do!

Expect to wait the average time between agreeing to buy and settlement of 6 weeks. Ensure you have finance available before you begin searching and 10% deposit is usually required, though negotiable. Best of luck.

LittleKittyCat

We found it pretty easy to be honest. It was stressful at the time, but then I think that buying a house always is! We bought ours at auction, which was probably the most nerve wracking part, but we were guided through it by a lovely estate agent that we met, who had absolutely no interest in us buying the house (he was with a different agency to the one that the house was for sale with).

We went through a broker for our mortgage (Aussie), and they recommended a conveyancer, and she recommended a pest/house inspection company.

On auction day, the house passed in, so we negotiated with the owner afterwards. We got it for about $50k lower than we would have been prepared to pay (based on the independent valiations that we had done) !

man_called_Horse

Go to the open day usually 30 minutes on a Saturday along with all other interested parties, put in your offer and hope for the best. If accepted pay your holding deposit 0.25% of the property value for the cooling off period. Once cooling off is up and you have agreed finance with the lender pay your deposit usually min of 20% these days and then you are into settlement usually a 60 day process, Pest inspections $240 and conveyancer $1200.

Trixietoes

Thank you for most of the comments. I have also been doing a search on the net.

I used one of the 'how much can I borrow' tools on some of the sites and based on solely OH's projected salary ($150K), we can borrow just over AU$1 million. This seems rather high (there would be no credit cards, HP or loans). We wouldn't want to look at buying a house more than £750k really (even though that sounds soooo high too). The repayments I think roughly equate to just over 1/3 of his take home salary. I think it is the figure of £750k or £450kish that is daunting me and making me think everything is going to be out of our reach as it most certainly would be in the UK.

I have read that if you are putting down a 10% deposit then it has to be ALL 'true' savings. i.e you have saved it whilst working and living in Aus. If you put 20%+ then it can be solely from money you have bought with you.

We wouldn't be in a position of putting 20% down. We are planning on bringing around £20k with us which will be needed to set ourselves up (we plan to rent for 1st 6 mths and not bringing furniture).

We own 2 houses in UK both are rented and pay their own way at the moment - unsure if this will be of any consequence re mortgage calcs - we will cross that bridge when we are ready.

Trixietoes

Thank you I have put the link into my favourites.

spottydog

I think you have to prove the savings are yours not a quick gift from a relly. Bank statements from the UK (or house sale receipt, shares sale dealing notification etc.) would cover for the period before you arrive.

With a deposit of less than 20% you will also be paying LMI so you would need to take that into consideration.

With regard to your UK houses you wouldn't be able to use them as proof of income probably but as long as they zren't costing you money from your wage gere to support i can't imagine it being to much of a problem.

The best ay to confirm what you can borrow and what you are comfortable with is to speak to a mortgage broker.

With regard to settlement here it is generally 42 days from signing the contract. Unless you buy at auction or sign a waiver there is a weeks cooling off period where you put down 0.25% (which you lose if you pull out) which gives you time to get building and pest inspections, finalise finance etc. without the risk of someone else stepping in and buying the property. This week is included in the overall 42 days.

Trixietoes

Ah yes I forgot about the LMI - thanks for reminding me, I'll add that to my geeky list.

No we wouldn't use the UK houses (equity etc) to try to enable us to buy anything in Aus, I was more concerned about whether the mortgage repayments we are responsible for would be deducted from any potential borrowing figure.

I am addicted to looking at Domain and realestate and buying several houses a week in my imaginary world

Thank you all for you kind assistance.

elice_in_oz

Just from our own experience, we were also told that we could borrow up to $1m by the calculators. Once we went into the banks, we were told it would be closer to $600k.

Even at that level, we would have struggled to live comfortably. The cost of living they came up with for a family of 4 was completely unrealistic. It allowed us something like $2,000 a month to cover EVERYTHING (petrol, utilities, food, clothes, etc...). IMHO, $2,000 is not enough to live on here in Melbourne with 2 young children and I doubt it would be in Sydney. My OH at the time was on about $135k and I was not working. We had a 10% deposit to put down and got the first-home-buyer's grant at the higher level it was at in 2009.

If you're not thinking of buying straight away, you should make sure you record where your money goes every month to have a clear idea of what you spend. Also, it is very hard to live without a credit card, even if you don't use it. You can get visa/mastercard debit cards, but I believe they may have a lower limit per day than a credit card. I am not advocating getting credit, but it does help to buy things online that require a lot of money upfront, such as plane tickets. We got a credit card just for that and the Frequent Flyer points and we use it sparingly.

Just to give you an idea, we borrowed $460k to buy a house at $512k. Between the LMI (Lender's insurance) and the stamp duty, I think we needed about $70k. We got about $12k from the FHBG and so ended up forking out about $60k in cash. That is not including pre-purchase inspections, removalists, etc. For a $750k house with a 10% deposit, you would probably need close to $100k in savings to cover it all.

If you borrow $675k at say 7.3% (a low rate at the moment), it will cost you $4,600 in monthly repayments. Your OH's take home monthly pay on $150k is $8,600 so the repayments would actually be over half his salary, not a third. And that is not taking rate rises into account...

Sorry, I don't mean to scare you off, but we were very surprised at the figures we got once we looked very closely into it. As I said, the calculators were pretty unrealistic and we knew there was no way we could repay over half a monthly wage.

When you choose where to rent, make sure you can afford to buy near there if you really like it and you get settled there. There's nothing worse than living somewhere for a few years and having to move far away because you can't afford to buy even though you could afford to rent.

Trixietoes

No, you're not being a scaremonger it is really good to hear about someones actual experience and your post has given me a great insight, which is exactly what I was hoping for. I'd rather know what I'm dealing with to get me out of cloud cuckoo land

We won't buy straight away, I guess no sooner than 12 months after arrival (more like 18 months), and I will be working too as we have no kids yet so just the 2 of us (but at some point soon we will be down to 1 salary so we are working all figures on OH alone). I sort of thought around the $100k mark to enable us to buy a house with the fees and deposit etc but if repayments are half of his salary then we will need to rethink our budget. We plan on renting a 1 bed apartment initially and keeping rent down and sus out the city, then maybe rent in and area that we like the look of to test it out.

I agree $2,000 is not enough to live on, without it being stressful anyway. If it comes to a case of not being able to have the lifestyle we want we may just continue to rent... or I'll have to persuade OH to move further out the city and have a longer commute

We have an offshore account with LTSB at the moment and have a credit card with that so won't have to get one in Aus as we can keep that with an Australian address (it's followed us around the past few years).

Thank you for taking the time to reply.